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Putting the Customer Back in Customer Loyalty Programs

October 10, 2018

Every company has two types of problems: Company problems and customer problems. These problems have been heavily impacted by the amount of technology used by marketing teams.

As loyalty programs have gained complexity, it’s become easy to focus on the tools and operation execution over the actual goal of creating more loyal customers. But, the best retailers have not fallen for this.

A loyalty program executed correctly (read: customer-focused) should be one of your company’s key differentiators.

There are a few reasons for this, but the biggest culprit is technology.

The Modern Marketing Team Can Look Like an IT Department

There is no arguing that modern technology has changed the world.

And with that, companies market their products and handle their loyalty programs differently. MarTech spending continues to increase year over year.

These tools make our lives easier, but do they really improve the customer experience? This is the first question we need to think about when evaluating new tools.

At CRMC this year, Shawn Sweeney, the VP of Digital Experiences at Starbucks, described a time when an employee asked a customer for his name and the customer replied, “Voldemort”. The employee then wrote on the cup, “He Who Shall Not Be Named.”

The new way that Starbucks prints labels creates a more efficient process, but it will never add that human element to the experience.

These are the types of experiences your customers will tell their friends about.

This is how memorable experiences are created.

Technology decisions have become so complex that it can be easy to get lost comparing features and benefits at the expense of the real reason you originally decided on making the purchase. This is why Clarus focuses on showing ROI for our clients.

The problem you’re solving is your first priority and then find the technology that helps solve it. This helps keep the focus on solving customer problems, which lies at the core of how we think about designing loyalty programs.

CX as a Driver of Loyalty

Customer Experience is another area we should talk about as it’s vital to customer-centric loyalty program.

We already talked about MarTech spend increasing, but CX is another place we’re seeing heavy investments. The crazy thing about CX is that even though spend is increasing, customer satisfaction ratings have remained more or less the same.

Why is this? Is it because it’s not effective?

Looking at the data, you may come to this conclusion. But the truth is that customer expectations are always rising and, more than ever, we’re being compared to other industries.

For years, social media teams have needed to understand that they’re not competing with just businesses, but also with baby pictures from their customers’ friends. This is the same realization that’s hit the CX world.

This is why customer expectations will continue to grow and it’s going to become easier to fall behind here.

In-store loyalty experience

The Starbucks example is just one of many that shows how in-store loyalty makes a big difference as well.

Think about the last loyalty program you joined.

Did the brand explain the program or did it just ask for your email in exchange for a coupon?

Creating a simple and streamlined enrollment process is still one of the most important aspects of a successful loyalty program, but it shouldn’t treat customers as lines on a spreadsheet.

The point of a loyalty program is not to collect email addresses, but many traditional loyalty metrics make that a priority.

A great example of this is when a member of our team tried to join a premium loyalty program and was not offered the program. He had to ask to join.

Not a great customer experience.

Store associates should be one of the best sources where customers learn about your loyalty program. This is especially true with premium loyalty programs (and why we prioritize in-store training with our loyalty programs).

The Customer Must Always Stay Central

The thing that ties all these points together is prioritizing customer problems. The customer must be at the center of every decision.

One of the easiest ways to do this is to evolve your reporting past usage data. We already talked about the importance of tracking ROI from your loyalty programs, but there are other quick wins here, like measuring the NPS score of your program.

As Peter Drucker said, “What gets measured, gets managed.”

Keeping your customers satisfaction as one of your key metrics is an easy way to help bring the focus back to the customer.

This is what sets modern retailers apart from the rest.

This is where differentiation comes from.

This is where great loyalty programs come from.

About The Author

Brian Carl

Brian is our Senior Director, Online Marketing and leads the overall direction of our B2B Marketing and Marketing Operations Teams. When he’s not chasing his three kids around at home, he enjoys reading as much as he can about marketing, technology and leadership or playing video games when they finally all fall asleep.